Development and Globalisation

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  • Created on: 19-04-16 16:22

Key Terms

Development - improvement in a country's economic + social profile

Globalisation - set of processes leading to integration of economic, cultural, political, social systems across the globe

Global shift - movement of industries from MEDCs to NICs + LEDCs. Initially manufacturing industry but more recently it involves services

Export orientated industries - manufacturing industries which produce goods for export

Import substitution - manufacturing industries that produce previosuly imported goods

Comparative advantage - produce goods more cheaply largely through lower labour costs

Special Economic Zones - designated areas that possess special economic regulations that are beneficial to foreign direct investments

Export Processing Zones - type of SEZ where bussinesses are free to import raw materials, manufacture + export without paying tariffs: keeps cost down 

Outsourcing - employment of people overseas to do a job previously done in a HIC 

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Development Indicators

Economic Indicators:

- GNP/GNP per Capita

- GDP/GDP per capita

Social Indicators:

- People per doctor

- Literacy rate

- Food intake

Demographic indicators:

- Birth/death rate

- Infant mortality rate

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H.D.I - Human Development Index

H.D.I - composite measure of development 

Several indicators are combined to produce a single, more representative figure between 0-1

It has 3 dimensions:

- leading a long, healthy life: life expectancy

- education: literacy rate, gross primary, secondary, tertiary enrolment

- decent standard of living: GDP per capita

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Global Social economic groupings – allocated

Groups to which countries are allocated:

- North + south divide 

- 1st, 2nd, 3rd world countries

- 'Development continuum'

Development continuum

LDCs - Ethiopia, Nepal

LEDCs - Peru, Kenya

FCCs - Russia, Lithuania

NICs - 1st Generation (1970-80): South Korea, Taiwan, 2nd Generation (1980-90): India, China, 3rd Generation (2000+): Qatar, Bangladesh


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Global Social economic groupings - choose to belon

Free trade areas + custom unions - allows members to trade goods freely but restrictions on goods imported from outside the union (Free Trade Area: NAFTA: North America Free Trade Area, Custom Union: Mercosur: South American Regional Trade Union)

Common Market - allows free movement of labour, capital + goods (EEC: European Economic Community)

Economic Union - are as above but also have common policies on things life transport, energy (EU: European Union)

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Benefits of trading blocs


- sell goods to partners in trading bloc with no quotas or tariffs

- can protect economy from goods/services from outside the trading bloc with quotas + tariffs


- individual countries may have a louder voice in world affairs as part of a larger/powerful group

- may have agreements to support/defend each other from external threats


- agreed common policies on fighting crime, protecting environment, workers' rights: measures require funding not possible for a single country 

- result could be a higher quality of life in each individual country 

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What is the EU?

1957 - Common Market but became an Economic Union in 1993

World's largest trading bloc: 450 million consumers/citizens + accounts for 20% of global trade 

Where is the EU?

- includes most of western + parts of eastern Europe

When was it set up + how has it developed?

1957: set up at the Treaty of Rome

1973: UK, Denmark, Ireland joined

By 2007: it had 27 members with Bulgaria + Romania being the latest 

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EU continued

Why join?

Political goal: countries co-operate + live peacefully after WW2

Economic goal: countries co-operate + become more prosperous 

How are they meeting these aims?

Agreed/developed common policies on economic, political, social goals:

- includes regional policies to redistribute wealth to the poorest (peripheral) parts of the EU

- subsidies to support industrial + agricultural sectors

- social chapter to introduce common working conditions 

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EU - consequences: Political + Economic


+ Democratic: MEPs elected to European Parliament - make decisions about European issues

+ smaller countries have larger say in global decisions

- Loss of sovereignty: decisions made centrally not by national gov.

- smaller regions in larger countries may feel ignored leading to demands of more federalism 


+ no trade barriers 

+ benefits of Regional fund: in 2007 Bulgaria + Romania received €6 million each: help improve infrastructure, employment + welfare

- Lower wages/cost in new members = businesses 'shift eastward'

- recession in 2007-08 left countries in debt = austerity measures 

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EU - consequences: Social

+/- Free movement of people 

+ Greater understanding of other people + cultures

- Being part of the EU can lead to resentment + increase in social tensions + potential unrest: could lead to rise in Anti-EU parties (UKIP in UK) or racist political movements ('Golden Dawn' in Greece)

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Sustainable Development Goals

Set up on 1st Jan 2016, they seek to improve development in all countries particularly in LDCs 

SDG 7 - by 2030 expand infrastructure + upgrade technology for supplying sustainable energy for all in particular LDCs

SDG 8 - By 2030 sustain per capita economic growth with national circumstances + at least 7% GDP growth per annum in LDCs

SDG 9 - develop sustainable, resilient infrastructure to support economic development particularly in LDCs, landlocked countries + small developing island states 

These are useful in 40m + 10m about LDCs 

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Development Theories

DTM - theory about how population changes as a country becomes more developed 

Clark's sector model - theory about how employment structure changes as a country becomes more developed

Rostow's theory (1960) - modernisation theory: rate of development of a country is largely dependent on what happens inside a country 

Frank's theory (1971) - dependency theory: rate of development of a country is largely a consequence of what happens outside a country 

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Development Theories – Rostow

Stage 1 - Traditional society: Subsistence economy: existence of barter, high levels of agriculture + labour intensive agriculture 

Stage 2 - Transitional stage: Development of mining industry, external aid usually needed, some growth in savings/investments

Stage 3 - Take off: Increasing industrialisation, some regional growth, growing savings/investments 

Stage 4 - Drive to Maturity: Growth = self-sustained, industry = diverse + increase in tech 

Stage 5 - High Mass consumption: High output levels


- Too simplistic: world = more complicated BUT easy to understand

- Financial infrastructure required to channel savings that are made into investments: not mentioned + infrastructure (roads, communication) needed: not mentioned

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Development Theories – Frank

Resources flow from a 'periphery' of poor/underdeveloped states to a 'core' of wealthy states enriching the latter at the expense of the former

The core- periphery theory 

- the core owns + consumes 80% of all goods + services

- Frank argues this situation benefits the core so it's in the interest of the core to maintain the inequality 

- so, the periphery is dependant on the core + can't make rapid progress along the development continuum 

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Why is Africa so poor?

Environmental reasons:

- Accessibility: around 15 African countries are landlocked

- Diseases: HIV/Ebola are prevalent in parts of Africa 

- Population distribution: 50% of Africa's population live in rural areas: education + healthcare = difficult to access

Political reasons:

Civil wars/violent unrest: currently an issue in at least 10 African countries

Corruption: some countries have been run by corrupt individuals 

Historical reasons:

Slave Trade: Young healthy Africans were forcibly removed + transported to America/Europe

Colonies: resources were exploited with minimal help + skills provided for the population

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Criteria used to define an LDC:

- GNI per capita of less than $900 (3-year average)

- Human Asset Index: % undernourished, death rate of under 5s, literacy + education rates

- Economic Vulnerability Index: population growth, reliance on agriculture, risk of homelessness, dependence on exports (measures weak economic resources)

Quality of life in LDCs

- Diseases: malaria = widespread, preventable diseases (measles) kills 11 million infants a year

- Food prices: rising = higher rates of malnutrition

- Unequal development: 100 million primary aged children don't go to school, economic value of domestic work = girls drop out of school at younger age, discrimination towards infant girls = mortality rates for girls are higher 

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LDCs - continued

Why in debt + why so hard to get out

- Oil prices: rose in 1970s 

- Interest rates: by 1980s global interest rates had doubled increasing repayments needed to service loans taken on in the 1970s = LDCs couldn't meet debt repayments = unpaid interest was added to original loan 

- Austerity: gov in LDCs (like Uganda) cut spending on health + education to pay back debt: poorest people suffered 

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LDC – Uganda

Location: east Africa, west of Kenya 

Key characteristics: Population: 31.6 million, Life expectancy: 51.9 years, Infant mortality rate: 85 per 1000 live births, GNI per capita: $643.33 (3-year average)

Reasons for low level of development:

- Earns little foreign money: reliance on low valued primary products: coffee earned $415 million between 2013-14

- Idi Amin's military regime in 1970s expelled wealthy Asian business community = exports collapsed 

- Huge loans were used to buy military weapons 

- Uganda's debt burden rose to $19 billion in 1992

- HIV/AIDS reduced life expectancy: babies born in 2007 had a 62% chance of reaching 60 

- 56% of the population is under 18

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LDC - Uganda: current/planned dev. projects

Current/planned development projects

- The cancellation of $1.5 billion of debt under the HIPC initiative is helping Uganda make progress:

Free primary education introduced: 5 million extra children attend school

nearly 10% more have clean water

AIDS awareness + sex education = priority 

improving roads + mobile phone networks = reduce remoteness of some areas

Wildlife parks beginning to earn foreign revenue through tourism: $1.4 billion in 2013-14

Kampala = developing service sector jobs 

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Global Shift


Lower operating costs - cheap labour costs although high quality labour is a major pull

Government incentives - gov. can offer incentives such as tax incentives + set up subsidies

Growth of TNCs - global companies choose their 'best' location 

First Phase of NICs

'Four Asian Tigers': South Korea, Singapore, Taiwan, Hong Kong 

Second Phase of NICs

BRICs: Brazil, Russia, India, China 

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Global Shift Timeline

19th - early 20th century:

industrial revolution = massive growth of UK industry, manufacturing completed in UK, imports banned to protect local industries 

mid-20th century:

manufacturing moves away from UK, deindustrialisation of MEDCs, range of industry moves to range of countries, TNCs take advantage of cheaper manufacturing costs, service jobs develop in MEDCs, NICs internal market grows, spread of influence in Southeast Asia

21st century:

finance + bank office operations shift to less developed countries, movement of manufacturing away from original NICs to LEDCs, growing industrialisation in LEDCs 

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South Korea

Key Facts:

GDP per capita: $32708

Life expectancy: 81.9 years

Infant mortality rate: 3.2/1000

HDI: 0.898/17th in the world

1960 - 1990: annual GDP growth rate of 9%

Road to success: 

1950s-60s: growth of labour intensive industries based on western designs = cheap products

1970s-80s: growth of heavy industry reduced cost of imports

1990s onwards: growth oh hi-tech industries helped provide vast export earnings 

Next stage: growth of consumer orientated services: economic succes = more wages 

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South Korea continued

Why was South Korea able to develop?

American aid: US offered $60 billion in grants + loans between 1950-80

Culture: willingness to work hard for the greater good, collaborative not individualistic culture

Global accessibility: location on traditional trading routes between Asia + US/Europe

Gov. policies: Park's gov. was authoritarian with a clear focus on economic success

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Brazil - global leader in biofuels + energy secure, growing hi-tech industry (aircrafts)

Russia - major player in global gas + oil industry 

India - outsourcing home grown manufacturing (Tata) + 'back office of the world'

China - 'workshop of the world' + moving into services: finance + banking 

Why BRICs should form a global social economic grouping 

Political power: alliance - they can convert growing economic power into greater political power 

Quadrilateral trade: all produce different goods - benefit from trade with each other

Economic power of the BRICs

Only developing world economies with annual GDPs of over $1 trillion

All in the top 10 in terms of foreign currency reserves, accounting for 40% of the world's total 

Their economies sustained growth rates of 6-10% during the recession

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Further growth of NIC's: China

Key Facts:

Since 1970, China's economy has doubled every 8 years

2010: world's 2nd largest economy

By 2035: China's economy will overtake US becoming the largest economy

Internal causes of economic growth 

Late 1970s: 'open door policy' allowed overseas investments 

Huge natural resources reserve of copper, graphite, mercury: raw materials for industrialisation

3 Gorges Dam supplies 11-15% of China's energy 

Spending on health + education over the last 50 years = skilled literate workforce 

Special industrial export zones stimulated mass manufacturing unimagined 25 years ago

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Further growth of NICs: China continued

External causes of economic growth

2001: joined the World Trade Organisation (WTO): TNCs now invest in China

Since 2000: 53% of China's exports are produced by foreign companies 

Between 2006-07: 60% increase in world trade as a result of China's industrialisation 

Challenge China faces:

Shortage of residential facilities + nursing services for the elderly due to aging population 

Consequences of China's economic growth 

10 million already live around 3 Gorges Dam, expected to double by 2020

50% migrants + 1/2 million new workers arrive each year in Beijing

Since 2000: $250 billion spent on infrastructure

Chongqing = one of the dirtiest cities on earth 

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Further growth of NICs: China continued

China's investment in Africa 

China has invested in 49 African countries including Nigeria, Egypt

China has spent $23 billion building oil refineries in Nigeria

China is in the market for Nigeria's uranium: competing with France

China partnered up with South Africa to construct 70 beer breweries 

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Globalisation of services – India

Key Facts

India's economic growth will overtake US in 2050 with $31 trillion 

Current GDP growth: 7.2%

Highest unemployment rate compared to other BRICs: 9.8%

Highest inflation compared to other BRICs: 8.6%

Internal causes of India's economic growth

Large youthful population: 356 million

Rising numbers of educated young workers = 'billion brains'

Produces 2 million English speaking graduates a year 

Spirit of innovation around obstacles called 'Jugaed'

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Globalisation of services - India continued

Consequences of India's economic growth

Electronic City in Bangalore was set up as a hub for hi-tech firms

2008: Oracle estimated India would need 8 million extra workers in out-sourced industries 

60% of Mumbai's population still live in poverty 

Environmental degradation costs India $80 billion per year

India is 80% energy insecure 

India's investment in Africa

Since 2005: invested in 80 African companies

2010: Bharti Airtel, India's largest mobile operator, bought Sudanese telecoms company Zain for $10.7 billion 

Tanzania has been given $180 of Indian credit to improve water supplies in Dar-es-Salaam

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Evidence of globalisation: the flows


- can share information/ideas all over the world but not all information is accurate + not all ideas are good


- HICs can invest in LICs easily 


- Products can be distributed across the globe to meet consumer demands 


- Increases/decreases workforce in a particular region 


- Provides jobs

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Causes of globalisation

Improved transport: containarisation reduced shipping cost by 70% between 1920-90

Advances in ICT: it is now more cheaper, usable + reliable

Growth of TNCs: can make use of comparative advantages in labour, taxation, environmental regulations

Growth of trading blocs: encourages trade across frontiers without restrictions (NAFTA, EU)

Free trade markets: trade is opened across the globe as tariffs/barriers are removed (World Trade Organisation)

Trading blocs are barriers to free trade markets: more trading blocs = less free trade

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Consequences of globalisation

- Makes it easier for large global companies to make + sell products all over the world: more people have access to their products 

Has reduced time taken for people + goods to be transported around the globe 

Ideas + beliefs can spread very quickly: Internet is the most effective way 

Traditional ideas/beliefs could be replaced by new ideas/beliefs 

Westernisation: countries begin to adapt to a western life + way of thinking 

Makes people aware of their own economic situation 

Makes mass migration more likely 

It is easier for people + gov. to communicate with each other

More people + goods are transported by sea + air: impact on environment as it harms air + water quality 

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Growth in 21st Century - Qatar

Key Facts

Location: small country to the east of Saudi Arabia 

Population: 1.9 million

Life expectancy: 79 (male) 78 (female)

Main exports: Oil, gas 

GDP per citizen: $690,000


Economic: one of the wealthiest countries in the region, gov. enocuraged diversification including tourism 

International influence: increasing regional influence + owns  Al Jazeera - attracted growing audience + displeasure of neighbouring states 

International reputation: won right to stage 2020 FIFA World Cup + 2019 World Athletics Championship

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Growth in 21st Century - Qatar continued

Qatar's development

Social: export money funds welfare state: many services = free/heavily subsidised for citizens

Economic: become a global energy giant with more than 15% of world's proven gas reserves

Political: absolute monarchy: emir + family, advised by council: 1/2 members elected, 2004: promised people a parliament: hasn't happenened yet

Concerns - Human Rights& Political tensions

- Migrant workers live in segregated areas + can't bring family unless they earn $1922+ a month

- Many work in conditions deemed as 'forced labour': are exploited by recruitment agencies whose fees = workers begin with heavy burden of high-interest debts or by employers who withold workers' passports 

- Al-ajimi, a poet, sentenced to life in prison as his poem was deemed insulting to the emir

- Due to foreign preassure, authorities have agreed to allow trade unions but may take time for it to be put in place 

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TNCs are resposnible for a large % of total world employment, production + trade 

Therefore they are the major contributor to Foreign Direct Investment (FDI) outside their home country

FDI - plants, equipment, property owned by businesses

Spatial organisation of a TNC

TNCs are usually organised in a particular way 'in space' in other words, there is a pattern to how TNCs organise their operations 

Headquarters + R&D are often located in the 'country of origin' which are usually MEDCs

Manufacturing plants are usually located in 'host countries' which are usually LEDCs

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TNCs - an evaluation

Employment: jobs brought to an area when TNC branch opens BUT often low skilled, low wages: exploit comparative advantages. Job security = limited: TNCs may relocate

Positive multiplier: TNCs need to provide support for new branches: generates wealth + employment in suppliers, transport + maintanace companies. Wages spent locally generating income + taxes for local gov. - cumulative causation BUT if TNC relocates = negative multiplier

Infastructure: TNCs sometimes build road links/accomadations BUT roads may only be a single route, accomadations limited to single person dorms. Host country may have to fund this as part of incentives

Products: produced by TNC will be sold in the country = local people can buy these products BUT may be beyond budget for people, may comepete with local businesses = decline in them

Taxes: TNCs + workers pay taxes - can be used by gov. - imporvements BUT tax rates = low: TNC chose to locate there as it may be part of the incentives

Skills: TNCs likely to train staff = worker's develop new skills + new ways of working (JIT) BUT skills used = basic + involve working on production, may not be transferable skills, oppertunities for promotion to management = limited

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TNCs - advantages in operating in other countries

- Lower production costs particularly in LEDCs

Transnational operation allows companies to move production around to their advantage closing unprofitable branch plants

- Circumventing trade barriers, by avoiding tariffs + quotas

E.g. a Japanese car manufacturer operating a plant within the EU

- Tapping market potential in other wolrd regions

Many LEDC countries are developing rapidly + are potential lucrative markets (Asia)

- Avoidance of strict environmental regulations which add to cost 

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TNC - Toyota

What do they do? Manufacture automobiles + car parts

How does Toyota organise its activities spatially?

International office: Toyota-Cho, Toyota City, Aichi Prefecture, Japan

14 R&D centres with 5 in Japan and 2 in the USA

52 manufacturing companies, with USA having 8 and China having 9 


1937: Toyota Motor Co., Ltd established

1938: Toyota Motor Co., Ltd. establishes Tianjin Plant in China

1957: Toyota Motor Sales, USA., Inc established

2008: four production plants in Europe operating 

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TNCs - Toyota: Impacts on host country


Provided employment: Toyota factory in Derbyshire created 1500 new jobs

Manufacturing plants in Guangdong, provides locals with employment + specialist skills


Set up the Toyota Study Assistance Fund in China to help improve education

Provided regular medical services in improvised areas in the Philippines 


2008 - 2013: volunteer initiative, ‘Greenways Project’, set up - employees + families in Brussels cleaned + planted trees along 9km of public roads near headquarters

Partnered with Chinese Academy of Sciences to implement a 10-year program (ended in 2011) to combat desertification in Xiaobazi Township, China: planted 3,000 hectares of trees + set up a training centre + developed a system for sustainable tree-planting activities 

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TNCs - Toyota: Impacts on country of origin


Employs over 70,000 permanent workers in Japan 

Guest workers forced to work 16 hours a day, 7 days a week, paid less than half the minimum wage at manufacturing plants


1969: Set up Toyota Traffic Safety Campaign to help reduce car accidents. They donate traffic safety picture books to children nationwide. 120 million+ picture books published.

Work environment = stressful: 200 employees a year = injured/killed from overwork/stress related illnesses


Began an initiative to develop forests in Asuke Town: volunteers help to conserve local forests

2007: Acquired 1,702 hectares of forest in Odai Town + have begun efforts to restore it + hold hands-on programs: ‘Woodday’ - adults + children take part in forest preservation activities

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TNCs - LG in South Wales

1996 - South Korean TNC, LG announced it was setting up assembly plant in Newport, South Wales

Plan: employ 6,000 directly making TVs + another 15,000 employed indirectly in supply industry - part of positive multiplier effect

Why choose this location?

Site: large area of flat land suitable to build on, no risk of flooding

Communications: excellent communications to London + rest of UK via M4

Markets: located inside EU - access to 350 million conumers + no tariffs/barriers

Workers: lost cost workers as unemployment = high due to decline of traditional industries (steel,coal)

Incentives: UK gov. through Wlesh Development Agency agreed to pay subsidies of £180 million 

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TNCs - LG in South Wales continued

What happened next?

- Economic slow down in east Asia (1999) led to a scaled back plan for the assembly plant in Newport

- 2003: LG announced plans to close the plant: loss of 870 jobs in the factory

The company blamed switch from CRT TVs to flat screens

- 2004: LG repaid $35 million of the $90 million grant aid it had recieved in 1996 back to the Welsh gov. This would be partly in cash (£15 million) + partly in land + buildings (£20 million)

And today?

- 2005: Irish radator manufacturer, Quinn group, announced plans to create 500 jobs in former LG plant

- They planned to produce 5 million radiators a year 

- The plan continues to produce radators from the 'world's largest radiator factory'

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Trade v Aid - Aid

Aid doesn't have to be money; it can be goods or technical support in building infrastructure 

Short term aid: money/resources to help recipient country cope with emergencies e.g. earthquakes

Long term aid: money/resources to help recipient country become more developed e.g. improve healthcare 

'Top Down' aid: organisation/gov. receives aid + decided where it should be spent, usually the case for large infrastructure projects e.g. building dams for hydroelectric power

'Bottom up' aid: money/resources given directly to locals e.g. to build a well - often used by NGOs

Bilateral aid: gov. gives aid directly to recipient country 

Multilateral aid: gov. gives aid indirectly through an international organisation that distributes it

Non-governmental aid (NGOs): paid for by voluntary donations

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Trade v Aid - Aid: Criticisms

Aid doesn’t reach those in most need:

- some recipient countries don’t use aid effectively: they have corrupt gov. who spend the aid for their own purposes

- delivering aid isn't easy, particularly in countries with poor infrastructure 

'Aid dependency': countries can become dependent on aid so aren't able to function/develop without it 

'Tied Aid': aid is given with a condition that the recipient country has to buy goods/services from donor country 

- if the goods/services are expensive the aid doesn’t help as it is spent on that instead 

However, aid is beneficial:

- it allows recipient country to invest in things that improves people's health and quality of life

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Trade v Aid - Trade

Trade can generate income through the sale of goods creating employment + income for LICs.

NICs such as South Korea are an example of how trade can support development.

This theory/viewpoint is called neo-liberalism

Some economists don't believe LDCs can develop in this way because the challenges they face are too great:

- LDCs often can't compete in the global market. If they don't have money to invest in technological developments that reduce cost of production, they can't match the prices of countries that can 

- Many struggle to trade due to diseases such as HIV/AIDS or conflicts 

- Trade can have negative social impacts: increased trade doesn't always = better quality of life 

- Primary products are an unreliable source of income + are very low profit 

- LDCs are often dependant on trading one thing 

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Trade v Aid - Trade cont.

Trade liberalisation: is free trade which is essential for development as fewer barriers = greater trade

Fair Trade - trade between companies in MEDCs + producers in LDCs in which fair prices are paid to the producers

Advantage of fair trade:

- guarantees prices for its producers that are always more than world market price

Disadvantage of fair trade:

- The products are more expensive so less people tend to buy them 

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Trade v Aid - Sudan


- one of the poorest countries in Africa

- experienced long periods of civil war + conflict still a huge challenge to development 

- economy has been growing rapidly: GDP grew by 4.7% in 2010 BUT no increase in living standards 

- poverty = widespread: 46.5% live below the poverty line of $1 a day 


- 2007: received $2 billion of aid: 70% = humanitarian to help cope with food shortages caused by conflict + draught

- Receives a lot of food aid: 2008: World Food Programme provided aid to 6 million

- US International Development funded construction + refurbishment of 140 primary + 5 secondary schools

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Trade v Aid - Sudan cont.

Benefits of aid:

- People are getting the food they need, reducing malnutrition 

- Increases the literate skilled workforce

- Improves infrastructure which would then help create jobs + improve trade

Problems with aid:

- Some aid maybe lost due to corrupt gov., particularly top down aid

- Civil war = aid may be spent in the wrong way

- Without jobs available, education seems like a waste: trade would bring the jobs needed

- It's short term: doesn't solve basic problems + increases chances of aid dependency 

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Trade v Aid - Sudan cont.

Sudan's trading situation:

- 1990s: Sudan exports = low profit agricultural goods (cotton, nuts, livestock), had a trade deficit + production & tarde decreased due to conflicts + droughts

- 1999: started expoting oil + as a result Sudan had its first trade surplus

- over the last decade, oil = main export + trade surplus of $1.4 billion in the early months of 2011

- 2013: exported $4 billion + imported $8 billion - negative trade balance of $4 billion 

- Petrol makes up 62% of exports followed by sheep + goats at 11%

- Wheat is the largest import at 8.7% followed by raw suagr at 5.9%

- 49% of exports go to China, 13% to Saudi Arabia

- 31% of imports come from China, 11% from India

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Trade v Aid - Sudan cont.

Benefits of trading:

- growth of oil industry brought economic growth + improved international relations with EU, Egypt

- trade surpluses can be used to improve infrastructure

Problems with trading:

- concerns that profit from oil industry aren't funding development because of a corrupt gov.

- agriculture is still important to the economy accounting for 40% of the GDP but its trade = low profit + unreliable so hard for Sudan to develop 

- difficult to make a lot of profit due to barriers: in 2012 average import tariffs were around 20% of the price of the product 

- 1997: US gov. imposed a trade embargo against Sudan: they believed the Sudanese gov. supports international terrorism - large consumer market lost + US corporations can't invest in Sudan's oil industry 

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Trade v Aid - Fair Trade: Windward Islands

Fair trade is a different way of trading.

Farmers are paid a guaranteed minimum price for their products. This means that they are a paid more (a fair price) for their products.

This is called a ‘fair trade premium’ + it allows them the opportunity to improve their lives + plan for their future. The result of this could economic + social development.

Fairtrade Bananas in the Windward Islands 

The Windward Islands are made up of St Lucia, Dominica, St Vincent and the Grenadines.

The islands earn around 20% of their total export earnings from banannas 

There are approx 4,000 banana producers in the Windward Islands with a total of 3,702 hectares of land under cultivation 

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Trade v Aid - Fair Trade: Windward Islands cont.

Social Impacts

- The 'Social Premium' helps to build schools: children of the growers can become more successful farmers or choose a different career which could support development

- No child labour allowed: so children have time to attend school + attain an education

- Fair trade farmers are earning more money: urbanisation can't take place: according to traditional theories, it's essential for development BUT for small islands, this reduces chances of overcrowding in an area

Economic Impacts 

- Farmers get 4.67c more for each pound of bananas: more money so can spend it on educating children + on local services = multiplier effect 

- Tourism = major employer in the Caribbean but Fair trade = job choice to train for: diversification = more stable income to the gov. for development 

- 'Social Premium' helps improve roads = easier for farmers to get their produce to the market: more bananas can be sold: time of journey is shorter + safer = farmers make more profit

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Trade v Aid - Fair Trade: Windward Islands cont.

Environmental Impacts:

- Bananas are not planted close to rivers to prevent chemicals reaching water supplies: people have access to clean water reducing chances of deseases 

- Numbers of birds increased + wildlife benefits from less chemical pollution: increaes tourism as bird watchers + wildlife enthusiasts ar drawn to teh area, bringing income 

- Farmers use strimmers to cut down weeds between banana plants. These are lent between farmers + reduce chemical use: this helps maintain biodiveristy + effieicent way to remove weeds without harming the plants 

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Economic v Environmental sustainability - Deforest

Deforestation - clearing forest on a massive scale without adequate replanting 

Causes of deforestation

Agriculture: land is cleared for farming, cattle ranching exposes pasture to soil erosion, plantations of cash crops (soya, palm oil) require more + more land to be cleaed

Monoculture: takes out the same nutrients so ferilisers have to be used

Logging for hardwood: demand for hardwood timber in HICs = felling of hardwood (mahogony, teak)

Hydroelectricity: cheap + plntiful energy. Once dam is built, resevoir behind floods large areas of forest so forest has to be cleared

Settlements: population increase = space needed  - contrubutes 15% to deforestation 

Mining: open cast mining = cheap resulting trees + soil being striped from underlying rocks 

Roads/railways: are essential for trade but end up cutting down swathes of forests 

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Economic v Environmental sustainability - Deforest


Econimic growth: made it possible for homes, office buildings + factories to be constructed, roads make trade + transport easier, forest land can be converted to productive land for agriculture

Biodiversity: is lost as plants + animals are driven to extinction - a specie becomes extinct every 1/2 hour, 90% of all species live in rainforests 

Hydrology: deforestation = watersheds are no longer able to sustain + regulate water flow - trees are no longer there to absorb water = more water in rivers so flooding downstream, soil is eroded + trabsported to lower regions: coastal fisheries + coral reefs have suffered from sedimentation 

Weather: as trees are cut there is less evpotranspiration = reduced rainfall

Climate: Deforestation removes vegetation exposing soil to extereme conditions of heat + rain which compacts soil. Rainwater washes out nutrients in the soil = no longer rich + fertile

Indigenous People: their lives are displaced as they are forced to move, their views are often ignored + are hardly included in decisions 

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Economic v Environmental sustainability - Cargill

What is happening? Where?

- Since 1965 Cargill (US TNC) have been growing soya on deforested land in Santarem, Brazil

- Between 2002-04 deforestation rates jumped from 15,000 to 28,000 hectares in Santarem

- Cargill are making $3.3 billion from soya exports 

The Winners:

- Cargill: earn a profit from growing + selling soya

- Employees: they earn money working for Cargill

- Consumers in MEDCs: soya is used to make cheap animal feed so cheap meat in MEDCs

- Brazilian gov: earn money via taxes + reduces unemployment, helping development 

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Economic v Environmental sustainability - Cargill

The losers

- Indigenous people: are forced to move

- Employees: may be exploited 

Economic or environmental sustainable?

Econimically sustainable for Cargill: make profits from selling soya, seeds, fertilisers

Economically sustainable for European livestock farmers: they are making money for a profit as they receive cheap feed.

Not economically sustainable long term: monoculture may = loss of soil fertility = declining yields

Not environmentally sustainable: deforestation rates are increasing = climate change, loss of biodiversity + pollution of rivers, will affect people locally + globally

it is possible to develop the rainforests in a sustainable way for environment + economy e.g. alley cropping is a way of maintaining the rainforest + growing commercial crops

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Economic v Environmental sustainability - Bwindi

What is happening? Where?

- 1992: Bwindi Forest in Uganda was upgraded to national park 

- 1994: declared a World Heritage Site - restricting access to forest resources

- Indiginous people, Batwa Pygmies, were forced to move 

Impacts on biodiveristy

- Gov. has taken action to protect biodiveristy especially the 600 mountain gorillas


Gov: park increased tourism, bringing in money, encouraging development 

Tourist guides: has provided employment for them

Scientists and naturalists: can research species in natural habitats

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Economic v Environmental sustainability - Bwindi c


- Batwa Pygmies: removed from their traditional forest homes in 1992 + have been forced to sette on the fringes of existing settlements 

Economic or Environmentally sustainable? 

Environmentally sustainable: Bwindi protects vegetation + wildlife from exploitation, forest can be enjoyed by people now + in the future, no danger of people damaging ecosystem: no people are allowed in the forest, except for guided tourists

Not socially sustainable: the Batwa have lost their culture + traditions

Could find a way of combining economic + environmental sustainability by giving the Batwa a key role in managing Bwindi national park: might involve zoning + allowing Batwa to return to parts of the forest

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Sustainable Tourism

Ecotourism - Responsible travel to natural areas that conserves the environment + improves welfare of locals

Mass tourism - Large-scale tourism, typically associated with ‘sea, sand, sun’ resorts + characteristics e.g. transnational ownership, minimal direct economic benefit to destination communities, seasonality + package tours.

Nature-based tourism - Any form of tourism that relies primarily on the natural environment for its attractions or settings.

Sustainable Tourism - Tourism that meets the needs of present tourist + host regions while protecting + enhancing opportunities for future generations

Sustainable tourism v Mass tourism

Dominica, Caribbean: 'stay over' tourists using small, nature-based lodges spent 18x more than cruise pasangers spent when visiting the island 

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Sustainable Tourism cont.

Growth of sustainable tourism

Beginning in 1990s, ecotourism has been growing 20% - 34% per year

- Nature tourism: growing at 10%-12% per annum in the international market

Who are sustainable tourists?

- Experienced travellers

- Those with Higher Education

- High Income bracket 

- Age bracket: middle age - elderly

- Opinion leaders 

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Sustainable Tourism: The Great Barrier Reef

Features which make it special therefore a tourist destination 

- On the north-east coat of Autralia, it is the largest coral reef system in the world

- supports a range of wildlife including vulnerable + endangered species

- 1980s + 1990s: improved access = rapid rise in tourism: numbers increased by 30% in 1980s

How is it managed

- 2003: Great Barrier Reef Marine Park Authority (GBRMPA) established zoning system - restricts tourists to certain activities, protecting most sensitive areas

- Activities like fishing are strictly regulated

- Tourist Operators have to obtain permits from GBRMPA: number of permits are capped + restriction on group numbers + boat sizesin sensetive areas

- Tourist Operators pay an Environmental Management Charge (EMC) of AU$3.50 per visitor per day to the GBRMPA which funds research, education + managemnt of the area

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Sustainable Tourism: The Great Barrier Reef cont.

Potential problems which may hinder sustainability 

- Coral reefs are easily damaged by pollution which affects species dependant on them: tourist industry creates pollution via waste disposal, litter, pollution from boats

- Coral can be damaged from boat anchors + poor diving practices: divers step on coral, breaking pieces

- Tourists can disturb wildlife: seabirds nest on the ground + when disturbed, the parents leave the nest, exposing the young/eggs to predetors

- The reef is culturally + economically important to local indigenous islanders: tourism limits where they can fish + carry out ceremonial activities

- Development of tourism along the coast damages coastal ecosystems (mangrove forests, estuaries): they are important for maintaining the reef - estuaries tranport important nutrients to the reef from land

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